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GAO report examines state practices for assessing Medicaid long-term care coverage eligibility

Posted on August 29, 2012 | No Comments

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Medicaid paid for nearly half of the nation’s $263 billion long-term care expenditures in 2010. Federal law discourages individuals from artificially impoverishing themselves in order to establish financial eligibility for Medicaid. Specifically, those who transfer assets for less than fair market value during a specified time period before applying for Medicaid may be ineligible for coverage for long-term care for a period of time. The Deficit Reduction Act (DRA) extended the look-back period to 60 months and introduced new requirements for the treatment of certain types of assets, such as annuities, in determining eligibility. States are responsible for assessing applicants’ eligibility for Medicaid, the criteria for which varies by state.

The Government Accountability Office (GAO) was asked to provide information on states’ requirements and practices for assessing the financial eligibility of applicants for Medicaid long-term care coverage. In a report on Medicaid and long-term care, GAO examined the extent to which states (1) require documentation of assets from applicants, (2) obtain information from third parties to verify applicants’ assets, and (3) obtain information about applicants’ assets that could be used to implement eligibility-related DRA provisions.

The report found that states varied in the extent to which they obtained information from third parties to verify applicants’ assets. On the basis of states’ responses to questions about the extent of documentation required from applicants and information obtained from third parties, it is unclear whether some states obtain sufficient information to implement certain provisions of the DRA. For example, 31 states reported requiring less than 60 months of documentation from applicants and financial institutions.

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